Operating profit up 12pc at Aviva Ireland as premiums written increase
Operating profit at the Irish arm of Aviva Insurance was up 12pc to €48m in the first six months of 2017, according to the latest financial results from the company.
The growth was driven by increased net written premium, up 12pc in the six months to 30 June, as well as initiatives in the company’s claims handling that have resulted in a lower claims ratio.
Aviva Ireland, which employs 1,150 people across Ireland, said that the benign weather in the year to date also contributed to the increased profits.
The company’s combined operating ratio, a key measure for profitability in general insurance, was at 84.7pc at the end of the six months, an improvement of 7 percentage points on last year.
However the company warned that private motor delivered insurance continued to be a challenging part of their business.
On this the company said that it continues to play a leading role in driving the reform of the motor market for the benefit of all of its customers,
"We are committed to working with the Government on the implementation of the recommendations of Cost of Motor Insurance Working Group Report and we continue to invest significantly in our fraud prevention and detection systems," John Quinlan, Aviva Ireland CEO, said.
The company’s life insurance business experienced what it described as "significant growth in sales of retirement products and bulk purchase annuities".
The present value of new life insurance business premiums is €574m up from €434m in 2016, however underlying profit in this arm of the business is down more than 50pc to €7m from €14.6m year on year. On a like for like basis the underlying profit is in line with last year.
"We are investing in our digital capability, products and distribution reach to build sustainable growth for the long term in this market. We expect this repositioning of our business to deliver accelerated profitable growth in the second half of the year in line with our plan," Mr Quinlan said.
Aviva also said in its statement that it welcomes the judgement of the Supreme Court in the Setanta case on the appropriate mechanism for dealing with the liabilities of insolvent insurers.
"It removes considerable uncertainty for insurers, policy hoders and claimants," Mr Quinlan said.